Recent developments suggest mixed fortunes for the development of a single patent-granting and enforcement system in Europe. The proposal for a Unitary Patent was given the go-ahead to proceed under the enhanced cooperation procedure (with 25 out of 27 EU countries in support). However, the proposed European and EU Patent Court system (EEUPC) was dealt a blow as the Court of Justice of the European Union (CJEU) pronounced the Draft Agreement incompatible with the EU treaties.

The CJEU Decision

On 8 March 2011, the CJEU gave its opinion on the "Draft Agreement on the European and Community Patents Court" (Opinion 01/09) which contains proposals to establish the EEUPC to hear patent disputes regarding both existing European Patents and the proposed Unitary Patent. The Draft Agreement proposed a centralized court system which would cover the EU member states, as well as non-EU countries who are party to the European Patent Convention (EPC) such as Turkey and Switzerland, and would have exclusive jurisdiction to rule on cases concerning the infringement and validity of patents and SPCs, as well as other patent-related matters such as licensing disputes. It provides for a Court of first instance (with a central division and local and regional divisions in the different Member States) and an Appeal Court.

The CJEU concluded that the transfer of jurisdiction to hear patent cases to a court which is "outside the institutional and legal framework of the EU" would not be compatible with the EU treaties. This is because the extra-EU agreement governing the proposed court would deprive the national courts of member states and also the CJEU itself (by preliminary rulings sought by national courts) of their powers to apply EU law as regards patent matters, and this would alter the nature of the powers conferred on the EU institutions by the EU treaties. It seems to have been significant to the CJEU's decision that the Draft Agreement did not limit the jurisdiction of the proposed court strictly to patent law deriving from the EPC, but proposed it should also be able to decide cases concerning EU legislation such as the Biotech Directive and the IP Enforcement Directive.

The Council Decision on the Unitary Patent

Two days later, on 10 March 2011, the Competitiveness Council approved the use of the enhanced cooperation procedure to proceed with the Unitary Patent despite strong opposition from Italy and Spain. The Unitary Patent would be a single patent covering 25 out of 27 EU member states (excluding Italy and Spain). Spain and Italy objected to the proposal for an EU-wide patent because of language issues. The Unitary Patent will use the three-language system of the European Patent Office (English, French, and German) with patents being valid in all 25 countries when granted in any one of the three languages, provided the claims are translated into all three. Draft Regulations covering the language regime and the title and procedure for the Unitary Patent was tabled by the Commission on 13 April 2011.

It remains possible for Spain and Italy to change their position on the Unitary Patent throughout the legislative process. However, this seems unlikely in the short term as both Spain and Italy have indicated that they will challenge the Council's decision in the CJEU.

What Litigation System Will be Used for the Unitary Patent?

With the EEUPC proposal rejected, it remains to be seen what form of litigation system the Commission will propose to go with the Unitary Patent. The CJEU has made it clear that a system as envisaged in the Draft Agreement will not be acceptable. However, without a multi-jurisdictional litigation system designed to avoid the commercial uncertainty and conflicting decisions which can arise at present because of the variations in courts across the EU (like the proposed EEUPC), it is unlikely that the Unitary Patent will provide the significant benefits it aims for. One possibility is that the national courts could be used as in the Community trademark system, with the CJEU giving references on unclear points of EU law. This may not be universally welcomed by industry and practitioners. It also seems unlikely that the court system proposed for the Unitary Patent will also be applicable to EP bundle patents relating to the non-EU EPC contracting states. However, the Commission has announced its intention to find a way forward for the patent litigation system following the CJEU's opinion, and this proposal should be available in the coming months.